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A-B InBev CMO on global marketing

With more than 800 million active users, Facebook may be the ultimate “social network,” but in Chris Burggraeve's mind, what people crave most in life are real, authentic, person-to-person encounters. And if you think about it, he says, that's precisely what beer does -- it brings people together from all walks of life to share their personal experiences.“So isn't beer, in today's speak, the best and most 'real' social network ever?” asks Burggraeve, chief marketing officer at Anheuser-Busch InBev and president of the World Federation of Advertisers. “Harnessing that big idea is what our brand connection plans are increasingly all about.” He recently answered a few questions about building brands internationally in advance of his address at the ANA/WFA Global Marketing Conference on March 14 in New York City.

Q: When it comes to implementing a global marketing strategy, why is it important to understand the strengths of your competitors in each market -- especially new competitors?

A: For a global top-five FMCG like we are, with 200-plus brands, three of which are global (Budweiser, Stella Artois, and Beck's), having a strong global marketing capability is critical, but marketing can never win the fight alone. One can only win over the long haul by sharing a same culture, by being systematically better operators, by being systematically better at bottom-line management, and by being superior at top-line management. Within the top-line capability, the key is to be better at resourceful brand-building than the competition -- in every country where we operate, and across countries.

For us that means having a clearly articulated AB InBev “Way of Marketing,” rigorously implemented globally by all our marketers and clearly supported and understood by our operators. The AB InBev Way of Marketing is about art, science, and discipline. It is the one language spoken by all. It consists of three key pillars. The first pillar relates to brand portfolio management, starting with proprietary demand segmentation models aimed at capturing existing, latent, and emerging demand. The second is about connecting in relevant and efficient ways with our drinkers. The third pillar is all about ongoing renovation and innovation. All our marketers go through a total of 24 modules in our AB InBev Marketing University -- and the training never stops. Many people from other functions also go through a marketing training “boot camp,” as marketing is too important to be left to the marketers only. The AB InBev Way of Marketing is part and parcel of our overall company performance and reward system, and it is clearly linked to our overall business model. It is designed to create sustainable brand health. And we all share a deeply held belief that “brand health today is top-line growth tomorrow.”

In our strategic planning and outlook sessions each year, we assess our progress versus our own stated dream of “becoming the best beer company in a better world.” We see if the deeper underlying values held by consumers have changed, whether new products have appeared that serve the same consumer need as our beers, and how our industry is perceived differently by stakeholders. Of course, we always take a step back to see what we can learn from existing and new competition. All the input is then used to make choices and various time horizon plans for every global function, including marketing, and for every country.

Q: Many companies have been criticized for introducing new products to new markets without taking the time to learn about the unique cultures that exist within each country. What valuable lessons have you learned about marketing outside “traditional” boundaries?

A: There are many entertaining and very instructive books about misfiring in global business, such as "Blunders in International Business," by David Ricks. One can get “lost in translation” very easily. I will never forget one of my first trips to China many years ago. I was invited to a hotel by the local Chinese manager with a note saying: “Welcome at happy hour for drinks and snake.” He meant snacks. Many people have stories like that. But the interesting thing is that most of these stories are about Western companies expanding into so-called emerging markets. Evaluating local opportunities through a parochial view -- through a specific American lens, for example -- can be very risky. It can lead to that “Ugly American”stereotype portrayed in the brilliant 1958 political novel by the same name. Recently, I saw a new Broadway show in New York City called "Chinglish." It's a hilariously funny story about a Midwestern entrepreneur and his first ventures in China. The theatre was filled equally with Chinese and Americans, yet everyone had a blast. The show made it clear, in a very elegant way, that getting lost in translation is not a one-sided phenomenon.

Empathy is needed by both parties. That is why cross-cultural management skills are more important than ever. You must have empathy for the country in which you wish to operate, regardless of the paradigms you bring with you from your host country. You must learn to see the world through a local lens to be successful and relevant. The lesson is equally valid for emerging market brands that wish to expand to the West. In my role as president of the World Federation of Advertisers, I have met many proud brand owners in China, Brazil, Russia, and India. They all wish to build their local brands into global brands, as they understand the long-term financial and cultural power of the global brand concept. They all want to be the next Apple, Coca-Cola, or Budweiser. All have strong cultures and heritages, all are flush with cash, and all are brimming with self-confidence. But if they don't watch out, the “Ugly (Country)” television series will become a reality fast.

Q: Is AB InBev making a big effort to reach consumers at a local level with customized messages, media, and even products? What are some of the challenges global marketers must consider?

A: People may perceive some of our brands globally, but they drink locally. To manage the inherent complexity of global brands like Budweiser and Stella Artois, we apply a “Freedom in a Framework” principle. The framework is very clearly prescribed globally. A global brand has one relevant positioning created based on testing in key countries, one global look and feel (from packaging to communication), one global campaign, and one centrally steered renovation and innovation pipeline. It is run by a clear global brand owner -- who, of course, functionally leads a team represented by the key countries.

The degrees of freedom by local marketers to manage the global brand are limited -- by choice. But they do have some flexibility to adjust to local taste and custom. Take sports, for example, and its link to Budweiser. The global number-one sport passion is soccer/football. But for Canadians, it's ice hockey, and in the U.S., baseball is the “great American pastime” that fits the Budweiser brand positioning best. Any execution within our current “Anticipation” campaign and “Grab some Buds” creative executions will take these sensitivities into account to drive relevance. All great global brands learn over time to balance global consistency with local relevance. That is a core capability to being successful in this global brand-building game.

Conversely, we are portfolio marketers. We have plenty of big local brands in each local portfolio, such as Bud Light in the U.S., Brahma and Skol in Brazil, Jupiler in Belgium, or Harbin in China. We call them our “local jewels.” The local VP of marketing is the high-level brand steward of a local jewel. He or she completely determines everything local, within the methodology of the AB InBev Way of Marketing. They have a local degree of freedom, and a completely locally designed framework. For example, Paul Chibe, VP of marketing in the U.S., stewards huge local brands like Bud Light and Michelob Ultra, and a very wide range of U.S.-centric brands. Paul -- who is based in St. Louis -- and his team manage the full portfolio in the U.S., including the global brands Budweiser, Stella Artois, and Becks. On the latter, though, he works closely with the team of Frank Abenante, global VP of brands and insights, who is based in New York. Frank and his team interact with all VPs of marketing around the world on these three global brands.

As a marketer, it's great to be able to acquire different skills over time within the same company -- running a local brand, running a portfolio of local and global brands in a country, running a global brand from the center, and ultimately, running a portfolio of global and local brands from the center. All require different skills, but I would advise any marketer to start on a local brand in a country first.

Q: New media platforms such as mobile and social are not only providing marketers with enhanced targeting and richer metrics, they are also increasing the value of integrated marketing programs. How are you leveraging these new platforms globally?

A: The question I'm most often asked is: “What is your social media strategy?” or “What is your digital strategy?” My answer is that we don't have a digital strategy or a social media strategy -- nor a TV strategy, for that matter. We have a “connection strategy.” In other words, we determine the most effective and efficient way to connect with our drinkers in a relevant way, no matter what the touchpoint. All these new digital tools are touchpoint possibilities that we experiment with. TV is a touchpoint we play with and reinvent fast, given the current changes in how Millennials consume the medium. During the 2010 World Cup, the best touchpoint for our local hero brand in Holland -- Jupiler -- was a promotional orange T-shirt with the inscription “Jup Holland Jup.” Everybody wanted one, and the T-shirt was talked about over social media and all the way to classic TV news. It built brand equity for Jupiler, per our measurements, and helped accelerate Jupiler sales.

Technology is great, however. It is helping us to get closer to consumers on a one-to-one basis each day. Already more than 30 million consumers globally have elected to become“friends” of our brands or opted in to our databases for ongoing conversations. Technology allows us to be even more relevant and useful to our consumers, both in their physical and virtual lives. They use social media to call for a meeting place. While in the bar, they take pictures and interact physically and virtually with their herd in an ongoing basis. Afterward, they share whatever happened while preparing for new live encounters, and then the cycle starts again.